Why Hope is Not a Risk Management Strategy

By Lowers & Associates,

Low-probability, high-impact events are something that most individuals and organizations would rather ignore. After all, chances are it won’t happen to you. Serious workplace violence events, active shooter incidents, and other unsavory threats are on the rise but it’s easier to assume it will happen to someone else. We don’t want to think about our own mortality or that of our organizations. Instead, we hope it won’t happen to us, to our employees, to our customers, or to our communities.

But then there are these facts:

  • 18% of all crimes committed occur in the workplace
  • Jury awards in workplace violence cases typically run in the millions of dollars
  • 70% of active shooter incidents occur in business or educational environments
  • Workplace violence is the number one cause of workplace fatalities for women

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What Your Risk Management Strategy Says About Your Company

By Mark Lowers,

Your risk management strategy sends signals to internal stakeholders, customers, partners, investors, the public at large, and sometimes a courtroom about what’s important to your organization.

A visible, well-designed risk management plan tells people that you are serious about managing the organization to protect what’s important and minimize losses.

Think of it this way. You would always expect someone like a potential partner or customer to evaluate your organization to determine how well it can deliver its promised goods and services. You would expect them to measure the opportunity you offer against alternatives in the same market.

The flip side of that ability to produce an outcome (i.e. promised goods and services) is the ability to minimize the threats against it, or in our parlance, to mitigate the risks. To anyone who is looking at your organization closely to decide whether to work with you or not, your strategy to mitigate risk is an integral part of the whole picture. An organization with a strong risk management strategy is a better partner or supplier, more trustworthy, and more likely to deliver on its promises.

How do People See Your Risk Management Strategy?

There are a number of ways people see your risk management strategy in their interactions with your organization. Here are a few of the important ones:

Contract negotiations

If your contracts are tight and include identification of risks and steps to mitigate them, your potential partner or customer gains confidence in both the process and the probable outcome. Most contracts these days go through a legal review that will insert typical clauses about liabilities. But going beyond the usual to identify risks to the partnership the contract represents, e.g., a third-party vendor, strengthens the impression of your organization.


You probably try to establish beneficial partnerships with suppliers, distributors, shippers and others whose cooperation helps to get your product to market. These partners will learn about your risk management strategy in how you set up joint processes to minimize threats. They will also understand that they are under scrutiny as potential risks as well.

Customers and prospects

If you are transparent in identifying the potential risks in a transaction and how you will address them, your customers will gain confidence that you know what you are doing. You will be seen as a reliable vendor.

Hiring process

Careful screening of candidates and employees sends a message to prospective applicants, fellow employees, and the public about your desire to create a safe and productive workplace. Lacking a defined employment screening process can leave you open to attracting candidates who are specifically looking to bypass such potential hiring barriers.


Your insurance company may require a risk management plan, or specific risk mitigation tactics, before issuing a policy. However, beyond that, the quality of your risk management strategy could earn you more flexible underwriting and possibly even a better rate. Insurers understand risk!


Your peers in your market know your business almost as well as you do. Your reputation with them is an important asset, and how you manage risk will be part of it.

Ultimately, it’s a matter of trust. A risk managed business or organization is simply more reliable.